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How Dogecoin changed my perspective on cryptocurrency

words.steveklabnik.com

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Re: How Dogecoin changed my perspective on cryptocurrency

#111

Post by steveklabnik »

derleth wrote: post #108
thwest wrote: post #93

Earlier quoted context omitted.

> That's a bunch of needlessly cynical and completely ignorant bullshit. [...] It isn't something that's done at the point of a gun. Alan Greenspan is of the opinion that our Iraq wars were 'largely about oil' and economic stability. The point is debatable, but certainly not completely ignorant bullshit.

If the 'point of a gun' element was the major determinant in how much currencies are worth, Zimbabwe, which had and has a military sufficient to kill its own citizens, would never have had hyperinflation.

The US's place in the global economy is just a bit difference than Zimbabwe, so that's a false equivalence.

Hint: I was talking about imperialism, not "buy stuff with the national money, citizen!"

Re: How Dogecoin changed my perspective on cryptocurrency

#112

Post by twobits »

minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

"That's a bunch of needlessly cynical and completely ignorant bullshit. We don't use the army to convince people to use dollars. That's quackery. People use dollars because the value is relatively stable, most goods for sale in the U.S. and exported from the U.S. are priced in dollars, people in the U.S. pay their taxes in dollars, oil tends to be priced in dollars internationally, foreign countries hold lots of dollars as reserves, in the U.S. you can have a bank account denominated in dollars that will retain it's value up to $250,000 even if the bank blows up(!), and so on. All of these are reasons people use dollars. It isn't something that's done at the point of a gun."

a) The value isn't stable. Dollars have lost ~90+% of its value since the fed was created. b) You pay taxes in dollars, because otherwise you'd be thrown in jail by force. c) Oil doesn't "tend to be valued in dollars". It's an agreement between the us and the saudis, to only sell oil in dollars, in exchange for protection. Leaders of other countries trying to change that, were suddenly found to be dictators, deposed and killed. d) Foreign countries hold dollars because otherwise they can't buy oil. e) The bank account doesn't hold it's "value" of 250k. It holds its nominal price.

Finally, because of the oil thing, the us has been happily printing dollars, and exporting its inflation to the whole world, stealing everybody.

Sorry, but you are the ignorant.

Re: How Dogecoin changed my perspective on cryptocurrency

#113

Post by afterburner »

twobits wrote: post #112
minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

"That's a bunch of needlessly cynical and completely ignorant bullshit. We don't use the army to convince people to use dollars. That's quackery. People use dollars because the value is relatively stable, most goods for sale in the U.S. and exported from the U.S. are priced in dollars, people in the U.S. pay their taxes in dollars, oil tends to be priced in dollars internationally, foreign countries hold lots of doll…

"The value isn't stable"

Stability here means not volatile. USD is not volatile, nor are the other major currencies of the world. USD moves tiny amounts day to day and year to year versus other currencies.

You are of course referring to inflation. But inflation in the US has been a slow, gradual thing. The Fed was created 100 years ago. You might have been able to buy a lot more with $1000 in 1913, but you got paid a lot less. Since your salary, and taxes, and almost all goods, were paid for in USD, it didn't matter if all the numbers crept up together slowly.

To call USD unstable, while defending something like BTC or Dogecoin, seems somewhat ignorant, or at least misleading.

Re: How Dogecoin changed my perspective on cryptocurrency

#114

Post by rokhayakebe »

minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

There’s no inherent reason that a piece of paper has a certain amount of value.

There is one actually: the cost of Labor and the perceived value of the services or goods that labor produced/produces/will produce. The value of money does not just appear, it is backed by everything everyone in a nation produces and consumes.

Re: How Dogecoin changed my perspective on cryptocurrency

#115

Post by twobits »

afterburner wrote: post #113
twobits wrote: post #112

Earlier quoted context omitted.

"That's a bunch of needlessly cynical and completely ignorant bullshit. We don't use the army to convince people to use dollars. That's quackery. People use dollars because the value is relatively stable, most goods for sale in the U.S. and exported from the U.S. are priced in dollars, people in the U.S. pay their taxes in dollars, oil tends to be priced in dollars internationally, foreign countries hold lots of doll…

"The value isn't stable" Stability here means not volatile. USD is not volatile, nor are the other major currencies of the world. USD moves tiny amounts day to day and year to year versus other currencies. You are of course referring to inflation. But inflation in the US has been a slow, gradual thing. The Fed was created 100 years ago. You might have been able to buy a lot more with $1000 in 1913, but you got paid a…

"Since your salary, and taxes, and almost all goods, were paid for in USD, it didn't matter if all the numbers crept up together slowly."

The key word is "together". They don't go up together. There is a time differential, with salaries trailing behind. People get constantly negatively affected this way.

Re: How Dogecoin changed my perspective on cryptocurrency

#116

Post by theboywho »

minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

Why is this the top rated comment? I just stopped reading it because of all the twisted logic, I was worried for my brain.

Re: How Dogecoin changed my perspective on cryptocurrency

#117

Post by minimax »

steveklabnik wrote: post #85
minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

wow. much serious. many tears. so angry. I specifically said I wasn't an expert. ;) > That's a bunch of needlessly cynical and completely ignorant bullshit. We're arguing the same thing. I'm just being a bit snarky about _why_ those things are true. You're totally right that those are the first-order reasons. > Stop calling currencies commodities. Sorry, my Marxism is showing. From a Marxist perspective, money _is_ j…

Sorry steveklabnik, I would have replied sooner but got stuck on a long phone call.

I'm not angry. I thought the post was worthy of a reasonably harsh takedown comment (sidenote: HN loves harsh takedown comments) because of its hubris. "Ho hum. We SF computer guys have got this shit all figured out. Paper currencies are bullshit because x, y, z. Also U.S.A. will bomb you if you don't agree." It's so completely fallacious and it ignores the decades experience that have got us to where we are.

I'm a tech person as I'm sure all of you are, but I think we are doing ourselves a disservice when we show up in other fields as arrogant outsiders proclaiming truth without understanding any of the details. I follow you on twitter and I think you understand this in terms of employment gender and discrimination issues but maybe not so much in terms of macroeconomic topics. That's all.

Re: How Dogecoin changed my perspective on cryptocurrency

#118

Post by afterburner »

twobits wrote: post #115
afterburner wrote: post #113

Earlier quoted context omitted.

"The value isn't stable" Stability here means not volatile. USD is not volatile, nor are the other major currencies of the world. USD moves tiny amounts day to day and year to year versus other currencies. You are of course referring to inflation. But inflation in the US has been a slow, gradual thing. The Fed was created 100 years ago. You might have been able to buy a lot more with $1000 in 1913, but you got paid a…

"Since your salary, and taxes, and almost all goods, were paid for in USD, it didn't matter if all the numbers crept up together slowly." The key word is "together". They don't go up together. There is a time differential, with salaries trailing behind. People get constantly negatively affected this way.

Let me put it this way: they go up together far, far, far more than whatever BTC or Dogecoin is doing.

Talking about very normal inflation in order to make make BTC/Dogecoin look bad is just weird. BTC dropped 50% in a day. And it could go up 100% tomorrow. That's volatility. Denying this just comes off as trolling.

Re: How Dogecoin changed my perspective on cryptocurrency

#119

Post by genwin »

natural219 wrote: post #27

There is one other aspect here I find very interesting, and it has to do with the efficient market hypothesis. The fact that people are buying Dogecoin simply because it is a fun internet meme kind of flies in the face of people who still view the price of financial assets as mostly rational, value-based prices, that can be deconstructed along the lines of asset-based valuation, financial ratios, available informatio…

Some people got beanie babies because they liked them, others because they thought their value would increase. The same thinking drives Dogecoin.

Re: How Dogecoin changed my perspective on cryptocurrency

#120

Post by minimax »

ChuckMcM wrote: post #107
egypturnash wrote: post #90

Earlier quoted context omitted.

The OP gets snarky about the reasons people think dollars are a viable medium if exchange; you get serious. But four of your six reasons why people use dollars kinda boil down to "people use dollars because lots of people use dollars". He's realized that "money" is just a very complicated game we play with each other. Possibly this is the lead-in to realizing that society is also a complicated game we play with each…

And the author figures out it is all about liquidity, which it is. The reason you might take a Euro for something is that you can give it to your bank and they can convert it into something you can use for more things (dollars, rupees what ever). I'm really curious though about what happens when someone walks up to Coinbase (as an example) and says "I've got 150,000BTC, please convert that into dollars for me at the…

It's not about liquidity. EURUSD is one of the most liquid currency pairs in the world. You can exchange millions or tens of millions in one trade at a firm price. That's liquidity at scale. In spite of that, Euro is still completely useless as a currency in the U.S. The liquidity argument is not a real argument.
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